Ethereum developers propose reducing validator net rewards to 0% when staking ratio reaches 50%, Aave founder warns of pressure on institutional and DeFi demand
2026-08-10 06:34
Odaily News: Ethereum developers have proposed a "Tapered Issuance Burn" mechanism, which plans to gradually burn a portion of validators' idealized duty rewards as the ETH staking ratio rises; when the staked amount approaches 50% of the total supply, ETH net issuance will drop to 0%.
The proposal's author stated that the ETH staking ratio has already exceeded one-third of the total supply as of April; without adjustments, Jerome de Tychey noted that by January 2028, the staked amount could exceed 70 million ETH, representing over 55% of the supply.
Supporters argue that excessive staking could first render small independent validators economically unviable, leading to staking concentration among custodians and large service providers; the proposal is planned to be implemented over an 18-month period, with an additional preparation window of approximately 6 months reserved before any potential network upgrade.
Stani Kulechov, founder of lending protocol Aave, stated that once the staking ratio exceeds 50% and rewards drop to 0%, yield uncertainty could weaken institutional staking and DeFi demand. He noted that ETH lending strategies may be affected, and the proposal remains in its early stages. (Bitcoin.com News)
The proposal's author stated that the ETH staking ratio has already exceeded one-third of the total supply as of April; without adjustments, Jerome de Tychey noted that by January 2028, the staked amount could exceed 70 million ETH, representing over 55% of the supply.
Supporters argue that excessive staking could first render small independent validators economically unviable, leading to staking concentration among custodians and large service providers; the proposal is planned to be implemented over an 18-month period, with an additional preparation window of approximately 6 months reserved before any potential network upgrade.
Stani Kulechov, founder of lending protocol Aave, stated that once the staking ratio exceeds 50% and rewards drop to 0%, yield uncertainty could weaken institutional staking and DeFi demand. He noted that ETH lending strategies may be affected, and the proposal remains in its early stages. (Bitcoin.com News)
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